529 funds

Huursoldaat

USNA 2026 Appointee Dad
Joined
Nov 16, 2021
Messages
90
This has probably been discussed before, but the Forum search doesn't allow a search for "529". :mad:

How have folks handled 529 money they had saved when their child decided to attend a SA? I've heard you can use some of the money to pay for initial expenses (uniforms, computer, etc.).
I'm also pretty sure you can withdraw money against a scholarship. Does anybody know the value of a SA scholarship (USNA for my son if that is important).
 

Capt MJ

Formerly Known As Attila The Hunnette
10-Year Member
Joined
Sep 27, 2008
Messages
14,753
This has probably been discussed before, but the Forum search doesn't allow a search for "529". :mad:

How have folks handled 529 money they had saved when their child decided to attend a SA? I've heard you can use some of the money to pay for initial expenses (uniforms, computer, etc.).
I'm also pretty sure you can withdraw money against a scholarship. Does anybody know the value of a SA scholarship (USNA for my son if that is important).
There are usually a few threads a year here in that topic, and one relatively recently.

Try an external search on Google:

“site:www.serviceacademyforums.com 529 plan college savings plan”
 

VelveteenR

Just gathering dust in the nursery...
5-Year Member
Joined
Jul 24, 2014
Messages
894
Try some of these:





 

Huursoldaat

USNA 2026 Appointee Dad
Joined
Nov 16, 2021
Messages
90
I see I need to leave the SAF front door and let google do the magic.
Thanks I will read over those links.
 

2025 hopeful

Member
Joined
Oct 26, 2020
Messages
215
I'll throw out some cautionary advice...

Be careful pulling the money out too early, you never know what will happen. For instance, DD is thriving at USAFA and loves it there. However they found some bizarre medical concerns that may prevent her from staying and not something we were aware of at all. She's still going through the process and we'll see what happen, but we are just grateful that money in the 529 is still sitting there for use if needed.

Spouse had a good friend at USCGA get into a skiing accident and had injured himself and needed to leave for the last 2 years. Cadets leave for a multitude of reasons and anything can happen.
 

Huursoldaat

USNA 2026 Appointee Dad
Joined
Nov 16, 2021
Messages
90
Yes definitely a good consideration to make sure you leave enough to handle a CIV college if that becomes necessary. I'd think SA credits would be transferable so drawing down equally each year seems to be a reasonable approach.
 

AROTC-dad

Moderator
5-Year Member
Joined
Mar 14, 2014
Messages
6,538
Thanks to his AROTC scholarship, my DS ended up with leftover 529 plan funds after graduating and commissioning . He is leaving it to compound tax free...hopefully for the education of our future grandchildren. (529 beneficiaries can be changed by the owner)
 

justme

Member
Joined
Nov 7, 2019
Messages
530
We are leaving ours in "just in case". And if it isnt needed for MID DS by commissioning, we will xfer to younger Midsib. This way we dont lose the tax amount by cashing out for SA.
 

VelveteenR

Just gathering dust in the nursery...
5-Year Member
Joined
Jul 24, 2014
Messages
894
This way we dont lose the tax amount by cashing out for SA.
Just to be clear, the Military Family Tax Relief Act of 2013 removes the penalty for withdrawing 529 funds for non-education purposes though you still pay taxes on capital gains, same as any other investment.
 

Hawk2Falconmom

New Member
Joined
Feb 8, 2022
Messages
3
I'll throw out some cautionary advice...

Be careful pulling the money out too early, you never know what will happen. For instance, DD is thriving at USAFA and loves it there. However they found some bizarre medical concerns that may prevent her from staying and not something we were aware of at all. She's still going through the process and we'll see what happen, but we are just grateful that money in the 529 is still sitting there for use if needed.

Spouse had a good friend at USCGA get into a skiing accident and had injured himself and needed to leave for the last 2 years. Cadets leave for a multitude of reasons and anything can happen.
From my research, I have found that if a cadet does leave a service academy they can be considered independent for FAFSA purposes at a traditional university and depending on what their assets/income are, I would imagine it quite likely they would qualify for significant federal grants.
 
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